Postal Promises

American stamp collectors have been the beneficiaries of one of the longest running non contractual government promises in  history and one that few governments world wide have extended to their own citizens. With one exception, the United States has never demonetized our postage stamps, meaning that every United States postage stamp issued since 1861 is still valid for postage (stamps issued before 1861 were demonetized at the start of the Civil war to prevent secessionists from negotiating postage from southern post offices). This is an implied contract. The United States has never implicitly stated that it would never demonetize older stamps and presumably retains the right to do so just as our government has the right to alter any non contractual benefit such as social security or medicare (the issue with the new “forever” stamps is more murky as marketing them as “forever” seems to imply an obligation). For very old truly collector stamps, this policy of the Post Office has no importance. $5 Columbians will always sell at a premium over face value. But most of the stamps of the last eighty years sell, in quantities, at postage value or just below and it is their ultimate postal use that determines their floor price.The face value of US 1960 to date is nearly $2500 and with sheets and plates many collectors have $10,000 or more of postage in their collections. Demonitizing this earlier postage will eviscerate the value of this material as it exists in far greater quantities than do collectors. Even the threat-overt or covert- to demonetize will have an effect. Part of the reason for the extreme weakness in the US postage market (and postage is now selling at near 60%) is just this feeling that the solution to the Post Office’s fiscal problems just might include demonetization. Essentially this uncertainty has reduced the value of all of our stamps and has operated on us just like a tax would. When governments alter promises made to citizens,  people suffer. When we look at the budget difficulties our country faces keep in mind the very high price that all of us are paying when we are told that taxes can never be raised.

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